Article
Transfer of title without registration - Finance Bill 2017 addresses the dilemma
Unless the party has performed or is willing to perform its obligations under the contract, and in the same sequence in which these are to be performed, it cannot be said that the provisions of Section 53A of the Transfer of Property Act will come into play on the facts of that case. It is only elementary that, unless provisions of Section 53A of the Transfer of Property Act are satisfied on the facts of a case, the transaction in question cannot fall within the scope of deemed transfer under Section 2(47)(v) of the Income Tax Act. The year in which capital gains on transfer of property are to be taxed has been debated. Finance Bill 2017 proposes to insert a new sub-section (5A) in Section 45 of the Income Tax Act which stipulates that capital gains arising from the Joint Development Agreement will be taxed in the year in which the certificate of completion has been issued by the competent authority
Ratio Decidendi
- Payment for software embedded in equipment is not royalty
- Receipts from service provided by foreign airlines to other airlines under pooling arrangements not taxable (Indo-Germany and Indo-Dutch DTAA)
Budget Highlights
- Immovable property being land or building or both held for a period exceeding 24 months will qualify to be a long-term capital asset
- Scope of domestic transfer pricing reduced
- Proposal to introduce secondary adjustment in the books of account of the assessee and its associated enterprise to reflect the actual allocation of profits between the assessee and its associated enterprise
- Thin Capitalization – Proposal to restrict deduction of interest payment made to non-resident associated enterprise to 30% of EBITDA
- Fillip to start-ups - Deduction of 100% for three consecutive assessment years out of any seven assessment years
- MAT and AMT credit will be available for 15 assessment years
- Carbon Credit - Liable to tax at the rate of 10%
